Exponential Energy Keynote - TPOC 2019
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The document discusses the transformation of the energy market towards exponential change driven by decentralized generation, digitalization, and evolving customer expectations. Key trends include the rise of demand response initiatives, integrated demand management, and energy as a service (EaaS) solutions, signifying a shift from traditional centralized power generation to more agile and responsive systems. A focus on exponential leadership and innovative approaches is essential for organizations to thrive in this changing landscape.
![4. Extreme Adaptability
5. Radical Openness
6. Hyper-Confidence
“While many leaders and their
organizations ignore most of the
criticism and suggestions [from within
and beyond], creating an open
channel to the crowd and the
mechanisms to determine signal from
noise can provide new perspectives
and solutions, allowing access to
whole new layers of innovation.”
6 Characteristics Of
Exponential Organizations:](https://image.slidesharecdn.com/tpocexponentialenergykeynote2019-200408203208/85/Exponential-Energy-Keynote-TPOC-2019-43-320.jpg)
Exponential Energy Keynote - TPOC 2019
- 1. EXPONENTIAL ENERGY Market Research & Trends that will Spark Change
- 2. SHERYL TULLIS Direct Technology Partner [email protected] linkedin.com/in/sheryl ▪ West Point/Captain, U.S. Army Info. Systems ▪ P&G Brand Manager – New Ventures ▪ Microsoft .NET / MSN / Chief of Staff ▪ SVP for IoT / connected experiences ▪ Head of Department of Why ▪ Exponential Leadership Consultant1997
- 3. ▪ Why are we here? ▪ Why do our customers care? ▪ Why do partners work with us? ▪ Why do employees want to work here? ▪ What do we want to be known for? ▪ How can we energize change?
- 6. Why do we need exponential change? Source: netburner.com
- 7. Utility Ecosystem 3808Utilities (G&Ts / Munis/ Coops, etc) 1 Includes ~2550 Munis 1 1055 Cooperatives 2 ~200 IOUs 3 4 RTOs 3 ISOs 132.58 M Residential Customers 19.2 M C&I Customers + Sources in Notes
- 8. Utility Spend By State (Millions) Utility Market Overview ▪ Surveyed: Utilities, Cooperatives, G&Ts, Municipal & State Utilities ▪ 2016: Federal government spent a total of $1,654,528,284 on utilities (10,789 contracts to 1,986 companies, average value of $833,096) Metrics 2012 2013 2014 2015 2016 2017 2018 Market Size (Billions) $532.68 $551.10 $587.78 $561.02 $545.91 $559.65 $567.29 Total Firms 5,893 5,967 6,023 6,056 6,119 6,214 6,329 Total Locations (HQ & Branch) 17,595 17,814 17,891 18,082 18,268 18,552 18,896 Total Employees 651,234 649,014 650,419 655,978 655,174 653,904 653,614 Average Revenue Per Firm (Millions) $90.4 $92.4 $97.6 $92.6 $89.2 $90.1 $89.6 Average Employees Per Firm 111 109 108 108 107 105 103 Source: Consortium for Energy Efficiency
- 9. Spending Forecast $532.7 $551.1 $587.8 $561.0 $545.9 $559.7 $567.3 $558.9 $548.5 $537.7 $526.9 $516.1 $505.3 Utility Spend, Actual and Forecast (Billions) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Consortium for Energy Efficiency
- 10. Market Change “We face competition from various entities and other forms of energy sources available to customers, including self- generation by large industrial customers and alternative energy sources. We compete with other utilities for sales to municipalities and cooperatives as well as with other utilities and marketers for wholesale electric business.” --WEC Energy Group
- 11. DSM Market Mix is Changing ▪ Spending on C&I mixed offering programs on the rise ▪ As of 2016: Residential home retrofit programs fell off the list (-9%) Customer Class Program Type 2016 Expenditures Commercial & Industrial Mixed Offerings $560.032,277 Low Income - $331,144,219 Residential Consumer Product Rebate for Lighting $244,220,441 Commercial & Industrial Custom $214,962,376 Commercial & Industrial Prescriptive $200,723,641 Commercial Small Commercial Prescriptive $193,282,914 Commercial Government, Nonprofit, MUSH $175,101,546 Most Common US Energy Efficiency Program Types by Expenditures Source: Consortium for Energy Efficiency
- 12. EE & Demand Response are Growing ▪ Demand response: 16% of US electric DSM expenditures in 2016 (increased by 11% compared to 2015) ▪ All regions saw increases—NE experienced greatest relative growth, increasing by 73 percent and $33 million additional spend Source: energy.gov
- 13. EE & Demand Response Sectors Region Residential Low Income C&I Other No Breakout Total Northeast 317 15 491 0 21 843 Midwest 613 11 609 54 31 1,319 South 574 51 697 12 98 1,432 West 400 11 547 211 371 1,540 Total 1,903 89 2,344 277 521 5,134 2016 US EE Gross Incremental Capacity Savings (MW)
- 14. © 2017 General Electric Company - All rights reserved DECARBONIZATION ELECTRIFICATION 2.0 ELECTRIFICATIONOFENERGY- INTENSIVEUSES By2026, RENEWABLESwill represent 40% of global installed generationcapacity* DECENTRALIZATION GROWING PENETRATIONof Distributed EnergyResources IMPACT • Endusersbecome activeactors of thepower system (‘pro-sumer’) …growing gridcomplexity IMPACT • Step increase in electricity consumption…accelerating Decentralization IMPACT • Growing share of renewables an increasing challenge to the traditionalpower system model DIGITIZATION EXPONENTIALGROWTH of connecteddevices & smartsensors IMPACT • Realtime decision making becomes possible …new software solutions open breakthroughoptimization Powerful trends areshapingthe nature of energy 2 Source: GE
- 15. Hot Spots Software ▪ Analytics ▪ Management & Control ▪ Virtual Power Plant Technology ▪ Solar PV ▪ Energy Storage ▪ Wind ▪ Combined Heat & Power ▪ Others End Users ▪ Industrial ▪ Government & Municipalities ▪ Commercial ▪ Residential ▪ Military Source: marketresearchfuture.com
- 16. Hot Spots End Users ▪ Industrial ▪ Government & Municipalities ▪ Commercial ▪ Residential ▪ Military Software ▪ Analytics ▪ Management & Control ▪ Virtual Power Plant Technology ▪ Solar PV ▪ Energy Storage ▪ Wind ▪ Combined Heat & Power ▪ Others
- 17. Market Insights Traditional DSM evolving to demand response and consumer- generated grid Installed DER capacity, including distributed generation, energy storage, microgrids, EVs, and DR, will increase significantly over the next decade Global electric power industry is undergoing a transformation from centralized generation toward the Energy Cloud: a multidirectional combination of DER/smart grid solutions While utility customers motivated by cost and environmental benefits rapidly adopt DER, grid operators are beginning to encounter numerous challenges associated with the variability and changing demand patterns of renewables. Rising demand for vendor- based energy business model disruptors that can provide turnkey energy as a service (EaaS) solutions. Opportunities in new or expanded government pilots
- 18. Source: GE Market Foresights ➢Navigant Research anticipates that integrated demand management - a mix of energy efficiency and DER - will create a competitive advantage PORTFOLIO ADVISORY SERVICES EE AND BUILDING OPTIMIZATION OFFSITE ENERGY SUPPLY • Strategic portfolio guidance • Portfolio benchmarking • DER technology feasibility, real-time EM&V • DER financing models • Lighting • Energy savings performance contracting • C&I energy efficiency retrofits • Building optimization and retrocommissioning • Retail choice procurement • Offsite LFGE procurement Traditional Efficiency Solutions EE AND BUILDING OPTIMIZATION PORTFOLIO ADVISORY SERVICES OFFSITE ENERGY SUPPLY ONSITE ENERGY SUPPLY LOAD MANAGEMENT/ OPTIMIZATION • Project energy auditing • Project ECM feasibility, manual EM&V • ESCO financing model • Lighting • Energy savings performance contracting • C&I energy efficiency retrofits • Building optimization and retrocommissioning • Retail choice procurement • Offsite LFGE procurement • Large offsite wind/solar procurement • Onsite solar PV • Combined heat and power • Onsite diesel and natural gas geosets • Microturbines, fuel cells • DR capacity market participation • Energy storage, microgrids, EV charging • Intelligent BEMs and BACs New DER Solutions Source: Forbes.com / Pike Research
- 20. Rise of DERMS & Demand Response Moving forward with large-scale deployment 11% Moving forward with pilot testing 31% Approving budgets 12% In planning/ investigatory stage 35% No strategy 11% DERMS DEPLOYMENT STATUS Shift from centralized to distributed power generation Increasing share of renewable power generation Growing mandates and updated policies Source: marketresearchfuture.com
- 21. Integrating DERMS NO STRATEGY (19%) OTHER (3%) UPGRADE EXISTING SOFTWARE SYSTEMS TO SUPPORT DERS (10%) STRATEGY FOR BUILDING DERMS BETTER INTEGRATE LEGACY & NEW SYSTEMS TO SUPPORT DERS (48%) BUILD NEW STANDALONE SYSTEM TO INTEGRATE WITH DIFFERENT SYSTEMS (21%) Source: utilitydive.com
- 22. Grid Optimization Grid Management Grid Analytics Microgrid DER Aggregation Integrated Distribution Planning (IDP) Case Studies: HECO IDP | Alectra/Enbala Microgrid
- 23. ▪ Outsourcing to energy business model disruptors who can provide turnkey energy as a service (EaaS) solutions are on the rise. ▪ EaaS is the management of one or more aspects of an energy portfolio—including strategy, program management, energy supply, energy use, and asset management—by applying new products, services, financing instruments, and technology solutions. ▪ Annual global market for deployment of C&I EaaS is expected to reach $221.1 billion by 2026. Energy as a Service (EaaS) Source: Forbes / Navigant Research
- 24. The electric power industry is facing a fundamental shift from centralized generation toward a more decentralized grid known as the Energy Cloud. Energy Cloud Source: Forbes / Navigant Research
- 25. Energy Cloud Increased opportunities for data sharing, AI, & ML Source: Forbes / Navigant Research
- 26. Energy Storage Modeling ▪ Utilities should develop “new modeling tools and new planning frameworks that allow for a more complete evaluation of flexible resources, such as energy storage." ▪ State-of-the-art modeling requires three critical criteria to incorporate and solve for the complexities of a renewables-focused electricity market: 1) sub-hourly dynamics consistent with observed and forecast real-time prices, loads and renewable production; 2) impacts of weather on renewable generation, load and market prices; 3) imperfect foresight included in unit commitment optimization. The National Association of Regulatory Utility Commissioners (NARUC) Resolution 11/14/18 : Source: greentechmedia.com
- 27. Outcomes Resource Planning ▪ Predictive analysis for resource prioritization & optimization ▪ Dashboards for resource capacity & demand ▪ Visibility of resource allocation across entire portfolio ▪ Accurate resource forecasting for identifying gaps Resource Execution & Change ▪ Workflows for instilling resource governance ▪ Standardized resource approvals and allocations ▪ Increased agility with what-If scenario planners to adjust resources when plans or priorities change Resource Tracking & Measurement ▪ ROI of your deployed resources ▪ Mobile time tracking ▪ Tracking and tracing budgets versus actuals ▪ Capitalization of labor cost
- 30. Proprietary and confidential. ©Direct Technology, 2019 “Incremental is satisfied with 10%. Exponential is out for 10X.” --Mark Boncheck (Harvard Business Review)
- 31. Proprietary and confidential. ©Direct Technology, 2019 Exponential Organizations ▪ Incremental mindset: making something better ▪ Exponential mindset: making something different ▪ Entrepreneur and author Salim Ismail: “An exponential organization is one whose impact (or output) is disproportionately large—at least 10 times larger—than its peers because of the use of new organizational techniques that leverage accelerating technologies."
- 32. cc c Source:PaulW. Taylor&Dustin Haisler Exponential Change
- 33. Exponential Energy: 4 Levers ▪ Third-Party Data Integration ▪ Performance and Innovation Metrics ▪ Predictive/Contextual Customer Experience ▪ Energy Cloud
- 35. Performance and Innovation Metrics ENERGY.GOV KPIs ▪ Controlling energy costs and energy consumption ▪ Minimizing environmental impacts ▪ Enhancing the image through marketing ▪ Improving load forecasting, energy management, and reliability 2019 State EE Scorecard: https://aceee.org/research-report/u1908
- 36. Performance and Innovation Metrics The Commercial Buildings Integration Program defined different tiers of performance metrics to address the needs of various users. TIER 1 METRICS Yields general monthly and annual results TIER 2 METRICS Yields seasonal, daily, hourly, or subhourly results; itemized by type of end use INDICATORS ID trends, often used to set policy and demonstrate progress toward goals. Source:energy.gov
- 37. Contextual & Predictive Experiences Sense installs in your home’s electrical panel and provides insight into your energy use and home activity through iOS, Android, and web apps. Source:sense.com
- 38. 6 Characteristics Of Exponential Organizations: 1. Visionary Customer Advocacy 2. Data-Driven Experimentalism 3. Optimistic Realism 4. Extreme Adaptability 5. Radical Openness 6. Hyper-Confidence
- 39. “If customers see their needs and desires being attended to at the highest levels, they are much more willing to persevere through the chaos and experimentation that often happens with exponential growth.” 1. Visionary Customer Advocacy 2. Data-Driven Experimentalism 3. Optimistic Realism 6 Characteristics Of Exponential Organizations:
- 40. “To create order out of high-speed chaos requires a process-oriented approach that is ultimately nimble and scalable.” 1. Visionary Customer Advocacy 2. Data-Driven Experimentalism 3. Optimistic Realism 6 Characteristics Of Exponential Organizations:
- 41. “Leaders who are able to articulate a positive outcome through any scenario, even downside scenarios, will be able to help maintain objectivity within their teams.” 1. Visionary Customer Advocacy 2. Data-Driven Experimentalism 3. Optimistic Realism 6 Characteristics Of Exponential Organizations:
- 42. “As a business scales and its activities morph, so too must its management. …. Constant learning is critical to staying on the exponential curve.” 4. Extreme Adaptability 5. Radical Openness 6. Hyper-Confidence 6 Characteristics Of Exponential Organizations:
- 43. 4. Extreme Adaptability 5. Radical Openness 6. Hyper-Confidence “While many leaders and their organizations ignore most of the criticism and suggestions [from within and beyond], creating an open channel to the crowd and the mechanisms to determine signal from noise can provide new perspectives and solutions, allowing access to whole new layers of innovation.” 6 Characteristics Of Exponential Organizations:
- 44. 4. Extreme Adaptability 5. Radical Openness 6. Hyper-Confidence“Two of the most important personality traits for an exponential leader to have are the courage and perseverance to learn, adapt and ultimately, disrupt the given business.” 6 Characteristics Of Exponential Organizations:
- 45. “But even more important, exponential change begins with leaders who believe in its possibility.” --Davood Ghods, Former Head of Office of Technology State of California
- 46. Proprietary and confidential. ©Direct Technology, 2019 Source: Atomic Habits by James Clear Exponential Leadership
- 47. Map systems and theories of change Empower sustainable business models & orgs Catalyze levers of impact Connect networks across sector, industry, and geos Promote diversity of ideas and engagement Understand S and exponential curves Embrace and model convergence Identify levers of disruption Engage early adopters Build uncommon partners Seek the big picture Explore external trends See and connect patterns Span time horizons Shape stories and roadmaps Observe and question openly Reframe opportunities Visualize possibilities Iterate to learn Promote radical candor Exponential Leadership Combining the mindsets, skillsets, and networks of futurists, innovators, technologists, and humanitarians to create abundant futures. Humanist You make choices that positively impact people & communities Technologist You accelerate possibilities with technology Futurist You imagine bold ideas Innovator You bring ideas to life Optimistic Bold Imaginative Ambitious Visionary Optimistic Bold Imaginative Ambitious Visionary Optimistic Bold Imaginative Ambitious Visionary Optimistic Bold Imaginative Ambitious Visionary
- 49. 5 Keys to Leading Exponential Programs 1. Internal Assessment: Understand the business challenges facing your utility today and what customer expectations will dictate over the next 3-5 years. 2. Roadmap Development: Create a strategic plan that addresses the business cases and conditions your utility needs to solve for. 3. Partnerships: Identify the internal departments and external solution partners necessary to effectively deploy your initiatives. 4. Customer Focus: Build roadmaps to design systems that give customers choice. Successful utilities will increasingly act as service providers managing a grid designed to optimize energy flows with the customer in mind. 5. Integration & Optimization: Based on the strategic roadmap, integrate technology into the grid to forecast and optimize grid operations.